All too often, unscrupulous insurance companies squeeze their insureds when the insured makes a claim. Of course, this is the time when the insured needs help the most. Those insurance companies will either refuse to pay what is due or delay paying a fair amount. Fortunately, insureds in Louisiana, as well as many other states, have a powerful tool to hold insurance companies accountable for that delay and denial. In Louisiana, that tool is known as La. R.S. 22:1220. That statute requires an insurer to act in “good faith” by fairly and promptly adjusting and paying claims. If the insurance company acts in an “arbitrary and capricious” behavior in adjusting the claim in a timely manner, the insured can force the insurance company to pay penalties and “any damages sustained as a result” of the failure to timely adjust the claim. That right just got a little stronger with a case known as Dickerson v. Lexington. In that case, the court ruled that “damages” under La. R.S. 22:1220 includes claims for mental anguish that result in an insurance company’s failure to timely adjust the claim. The court stated that “Damages for mental anguish may be awarded under La. R.S. 22:1220 for breaches of good faith.” We applaud this decision and hope that other courts hold unscrupulous insurance companies accountable for all the damages that its failure to fairly and timely adjust insurance claims causes hardworking, deserving families.
Richard J. Arsenault, 2011
